This is the first installment of a 3-part article on the use and potential of offshore wind turbines in the United States. The goal of the piece is to contextualize how offshore wind is currently being used. In the second installment, I discuss the current impediments to broader growth in the industry—namely, the Jones Act and its progeny. In the third installment, I argue for broader usage of offshore wind turbines and detail how countries, specifically those in Northern Europe, have successfully integrated offshore wind into their energy system.
In 2016, the United States Department of Energy and the United States Department of the Interior (“DOI”) initiated the National Offshore Wind Strategy. The most recent report on the topic from the two agencies stated, “[offshore wind] is an abundant, low-carbon, domestic energy resource. It is located close to major coastal load centers, providing an alternative to long-distance transmission or development of electricity generation in these land-constrained regions.”1 The report goes on, “Once built, offshore wind farms could produce energy at low, long-term fixed costs, which can reduce electricity prices and improve energy security by providing a hedge against fossil fuel price volatility.”2 To be more specific, the 2016 report included six keys reasons why the emerging potential of offshore wind production should be captured by the U.S. market as a sustainable, efficient means of energy production.
First, the United States has widespread offshore wind potential. According to the Department of Energy, the United States has a “technical potential of 2,058 gigawatts (GW) of offshore wind resource capacity [in] waters using existing technology. This is equivalent to an energy output of 7,200 terawatt-hours per year— enough to provide nearly double the total electric generation of the United States [per year].”3 The technical potential output numbers remained the same in 2019. However, almost all of the opportunity remains ‘potential’ because the vast majority of the projects, many of which have been greenlit, remain unbuilt for a variety of bureaucratic and contractual reasons. On that note, even back in 2016, the market for offshore wind was developing rapidly. The growth in market potential, in terms of proposed projects, has only increased in recent years.4 For example, “By the end of 2015, DOI had awarded 11 commercial leases for offshore wind development that could support a total of 14.6 GW of capacity . . .”5 In the past three years, the DOI has greenlit another fifteen projects.6 All of these projects, except one, have hit major snags that will be discussed in the second installment of this article. Despite the stagnation of each of the approved projects, the DOI expects that its proposal to have 86 GW of offshore wind production, per year, by 2050 is still likely to be achieved.7 If the industry hits this number, “. . . offshore wind would make up 14% of the [2050] projected demand for new electricity generation in the coastal and Great Lakes states.”8 To be clear, the previous statistic means that if the U.S. utilizes just 4% of its offshore wind potential in the next 30 years, the industry would provide almost 20% of the energy used in every coastal state and the states touching the great lakes.9
Another clear upside to ushering in an offshore wind revolution is the relative cost of harnessing offshore wind power. According to the National Energy Laboratory, the offshore wind industry could see “. . . cost reductions below $100/megawatt-hour by 2025 in some areas of the United States, and more widely around the country by 2030. Assuming near-term deployment of offshore wind at a scale sufficient to support market competition and the growth of a supply chain, development of offshore wind energy in markets with relatively high electricity costs, such as the North-east, could be cost-competitive within a decade.”10 If the industry hits this mark, offshore wind production and dissemination would be amongst the most efficient energy sources in the United States of America. Moreover, the figures provided above do not account for increased efficiency over time as, potentially, the industry produces more efficient turbines, energy storage systems, and distribution channels.
To that end, the Department of the Interior asserts that increased usage of offshore wind turbines would likely lead to significant benefits for electrical system operators and utility companies.11 The DOI argues that “[b]ecause of its low marginal costs of production and the fact that offshore winds in many regions tend to be strong at times of peak demand, offshore wind energy can lower wholesale electricity prices in many markets. Offshore wind can also decrease transmission congestion and reduce the need for new long-distance transmission.”12
While the benefits discussed provide ample reason to believe that increased investment in offshore wind is the way of the future, the most profound upsides of the industry are its potential effect on the environment and on the economy. In the case proposed above, utilizing 4% of the potential productivity of offshore wind, the Department of Energy predicts a 1.8% reduction in “cumulative greenhouse gas emissions [for the U.S.].”13 Again, expecting just 4% of the potential output, this change could save $50 billion in damage to the environment.14 The same type of perceived benefits could come in the water industry, where the country could save 3-5% of all water used by utilizing just 4% of the potential offshore wind capacity.15 The economic development associated with this proposal is approximated to be “$440 million in annual lease payments into the U.S. Treasury and approximately $680 million in annual property tax payments, as well as [the creation] of approximately 160,000 jobs in coastal regions and around the [U.S.].”16 The perceived upside, which has not wildly changed since 2016, paints the picture of a panacea for the energy industry. While the potential for offshore wind should be lauded, the interim 3-years since the discussed report was written has shown that challenges expanding the industry remain.
The challenges to the industry will be considered more deeply in the second installment of this essay. For now, the important statistics to know are that the United States currently has one operating offshore wind farm. Built off the coast of Rhode Island’s Block Island, the only currently running offshore wind farm was built in 2016. The “Block Island Wind Farm” is a 30 MW, 5 turbine project that generates enough power for 17,000 Rhode Island homes.17 Prior to the project, “[Block Island] was powered by 5 diesel generators which burned over 1 million gallons of fuel every year.”18 Now, Block Island is entirely powered by offshore wind. Of course, not all of the power is used for tiny Block Island, the turbines also provide power for some 14,000 mainland Rhode Islanders.19 Moreover, the project currently lowers “carbon dioxide emissions by 40,000 tons each year. That is 800,000 tons over 20 years—the equivalent of taking over 150,000 cars off the road.”20 The statistics from Rhode Island are promising. But, it is one project with 5 turbines. Because the only currently operating project is so small, the industry, which continues to struggle in terms of real growth, is finding it difficult to break through into the mainstream discussion of sustainable energy solutions. That said, the pipeline of proposed projects, most of which have defined completion plans and strategies for growth, are leading the industry into a new renaissance of development.
One of the major upcoming projects, Revolution Wind, could eventually produce, at a minimum, 4,000 MW of energy per year.21 The project, proposed jointly by officials from Rhode Island and Connecticut, would, by 2023, generate sustainable energy for approximately 400,000 homes. Another innovative project, Vineyard Wind, proposed and initially approved by Massachusetts, will include 84 turbines, each the height of the statue of liberty, off the coast of Martha’s Vineyard, MA.22 The initial proposal cited 2022 as the completion year and the project is expected to generate energy for 400,000 homes in Massachusetts. However, the project was halted after a 2019 report by the Department of the Interior’s Bureau of Ocean Energy Management requested further research be done on the project’s environmental effects prior to final approval.2324 Prior to the DOI’s report, the Massachusetts Clean Energy Center released a report, titled Offshore Wind Workforce Assessment, which asserted that the various projects in the State would create 1,600 MW of offshore wind energy and support between 6,870 and 9,850 job-years over the next ten years and generate a total economic impact in Massachusetts of between $1.4 billion to $2.1 billion, between $675 and $800 million of that would be direct economic output.25
The New England region is not the only part of the country looking to quickly expand the offshore wind industry. According to a 2019 report from the DOI’s Bureau of Ocean Energy Management, groups in Delaware, Virginia, Maryland, New Jersey, New York, and North Carolina have applied for offshore leases to set-up wind turbines for energy production.26 Each of these new areas of growth faces distinct challenges to actually building functional offshore wind farms. But, the trend in applications is rising as the potential positive economic and environmental effects become clearer.
I spent this article relaying the upsides and potential of moving toward offshore wind energy. The point of this essay was to paint the picture that offshore wind energy has the potential to massively change how we harvest energy in the United States. Moreover, the industry has the potential to provide positive externalities to the environment and the broader economy of the country. Based on the rosy picture I floated, one might ask: If offshore wind has the potential to be a panacea, why is it only being used in one small location off the coast of Rhode Island? The reasons that the technology has not taken off in the United States, as it has in Europe, are plentiful and fascinating. As a brief previous, the reasons range from the application of an archaic set of laws called the Jones Act, to an instance where a wind farm could have potentially ‘spoiled’ the ocean views of two homes owned by perennially powerful families, to the politics of the current administration. In short, the reasons that the industry has slowed in the United States are varied. I will spend the next essay diving deeper into these reasons and what can be done about each of them.